By Craig Kessler
Director, Governmental Affairs, Southern California Golf Association
Don’t always believe what you read and hear about California being a dismal place to be in the golf business. And not just because of the great weather and splendid scenery. Yes; there are laws and regulations and rumors of laws and regulations that cause us distress, but there are also laws, regulations and ways of doing business in California that are the envy of the other 49 states.
Here are three of them for you to chew on – one that protects the state’s municipal parkland golf courses from development, one that protects the state’s private golf clubs from being taxed out of existence, and one that protects all species of golf course and club from the cost and accounting burdens of general taxation.
The 1971 Public Park Preservation Act [Sections 5400-5409 of the California Public Resources Code] makes clear up front what it’s all about, and excerpted verbatim from the first section of the Act it is this:
No city, city and county, county, public district, or agency of the state, including any division, department or agency of the state government, or public utility, shall acquire (by purchase, exchange, condemnation, or otherwise) any real property, which property is in use as a public park at the time of such acquisition, for the purpose of utilizing such property for any non-park purpose, unless the acquiring entity pays or transfers to the legislative body of the entity operating the park sufficient compensation or land, or both, as required by the provisions of this chapter to enable the operating entity to replace the park land and the facilities thereon.
The land on which so many of California’s great and not so great municipal golf courses are located has commercial and residential development value in the billions of dollars. Think Torrey Pines in San Diego, Rancho Park and Griffith Park in Los Angeles, Harding Park and the Presidio in San Francisco. Indeed, think municipal golf courses in virtually every major city and suburb in California. And then think what might have become of them if the Public Park Preservation Act had not been on the books the last 47 years. Enough said.
In 1960 the voters of California passed an Initiative that enshrined in the state Constitution a provision that land used exclusively for a non-profit golf course of 10 acres or more can be assessed only for that purpose and not for what assessors call the “highest and best” use of the land. With that vote California joined 23 other American states in assessing property taxes on golf clubs on a “current use assessment for open space/recreational land” basis. The same basis has been extended in parallel fashion to the daily fee sector.
That’s why California and the 4 states that make this standard available for golf courses exclusively (among them our sunbelt neighbors Arizona, Nevada and Hawaii) haven’t been distressed by conflicts between a municipal sector exempt from property taxation and the rest, often subject to onerous property tax burdens. Many states, particularly Midwestern states, have suffered this division in their state golf communities, and that division has rendered them much less effective when lobbying in their state capitols. Indeed, given the various “living wage” and “prevailing wage” requirements that apply to municipally owned golf courses in California but do not apply to privately held golf properties, it is the municipal sector that operates at a financial disadvantage, albeit that has not caused a rift between the two sectors. More about that and the advantages it creates for the California golf community in a future commentary – “advantages” that the nation’s more fractured state golf communities might find instructive.
Twenty-three American states tax golf in some form or other, ranging from Georgia, where the tax is limited, to Minnesota where virtually every golf transaction is taxed. Both “Red” and “Blue” states tax golf, and the ways they do it are often unrelated to the politics of the state. Texas taxes private club golf but not daily fee or municipal golf. Washington does the opposite, subjecting only the public sector to the tax collector. California exempts the game from all forms of taxation save the sales tax one pays for merchandise purchased in a golf shop.
California is practically unique in going to such great lengths to insulate its parkland golf courses from commercial repurposing. It is joined by roughly half of the nation’s states in exempting the game from onerous property taxation. And it exempts greens fees, membership dues, range balls, and cart rentals from all forms of taxation. Part of my job is keeping things that way.
The next time your blood curdles when reading about California’s latest piece of onerous environmental, workplace or wage legislation, remember that there is more to the California story than those things; there are these things as well.
Craig Kessler is Director of Governmental Affairs for the Southern California Golf Association (SCGA) and Chair of the California Alliance for Golf’s (CAG) Legislative Committee. He can be reached at ckessler@scga.org